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Boeing Company - 3rd Quarter Results

Boeing Reports Third-Quarter Results

, /PRNewswire/ -- CHICAGOOct. 28, 2020

The Boeing Company [NYSE: BA] reported third-quarter revenue of .1 billion, GAAP loss per share of () and core loss per share (non-GAAP)* of (), reflecting lower commercial deliveries and services volume primarily due to COVID-19 (Table 1). Boeing recorded operating cash flow of .$14$0.79$1.39($4.8) billion

"The global pandemic continued to add pressure to our business this quarter, and we're aligning to this new reality by closely managing our liquidity and transforming our enterprise to be sharper, more resilient and more sustainable for the long term," said Boeing President and Chief Executive Officer . "Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability for us as we adapt and rebuild for the other side of the pandemic. We remain focused on the health and safety of our employees and their communities. I'm proud of the dedication and commitment our teams have demonstrated as they continued to deliver for our customers in this challenging environment. Despite the near-term headwinds, we remain confident in our long term future and are focused on sustaining critical investments in our business and the meaningful actions we are taking to strengthen our safety culture, improve transparency and rebuild trust."Dave Calhoun

Following the lead of global regulators, Boeing made steady progress toward the safe return to service of the 737 MAX, including rigorous certification and validation flights conducted by the U.S. Federal Aviation Administration, Transport Canada and the European Union Aviation Safety Agency. The Joint Operational Evaluation Board, featuring civil aviation authorities from , , , and the European Union, also conducted its evaluations of updated crew training. The 737 MAX has now completed around 1,400 test and check flights and more than 3,000 flight hours as it progresses through the robust and comprehensive certification process.the United StatesCanadaBrazil

To adapt to the market impacts of COVID-19 and position the company for the future, Boeing continued its business transformation across five key areas including its infrastructure footprint, overhead and organizational structure, portfolio and investment mix, supply chain health and operational excellence. As the company resizes its operations to align with market realities, Boeing expects to continue lowering overall staffing levels through natural attrition as well as voluntary and involuntary workforce reductions, and recorded additional severance costs in the third quarter.

Operating cash flow was in the quarter, reflecting lower commercial deliveries and services volume primarily due to COVID-19, as well as timing of receipts and expenditures (Table 2).($4.8) billion

Cash and investments in marketable securities decreased to , compared to at the beginning of the quarter, primarily driven by operating cash outflows (Table 3). Debt was , down from at the beginning of the quarter due to the repayment of maturing debt.$27.1 billion$32.4 billion$61.0 billion$61.4 billion

Total company backlog at quarter-end was .$393 billion

Segment Results

Commercial Airplanes

Commercial Airplanes third-quarter revenue decreased to .6 billion, reflecting lower delivery volume primarily due to COVID-19 impacts as well as 787 quality issues and associated rework. Third-quarter operating margin decreased to (38.1) percent, primarily driven by lower delivery volume, as well as million of abnormal production costs related to the 737 program.$3$590

Commercial Airplanes added the final 777X flight test airplane to the test program and the GE9X engine received FAA certification. In October, the company decided it will consolidate 787 production in in mid-2021, which did not have a significant financial impact on the program in the third quarter. Commercial Airplanes delivered 28 airplanes during the quarter, and backlog included over 4,300 airplanes valued at .South Carolina$313 billion

Defense, Space & Security

Defense, Space & Security third-quarter revenue decreased to , primarily due to derivative aircraft award timing, partially offset by higher fighter volume (Table 5). Third-quarter operating margin decreased to 9.2 percent reflecting less favorable performance, including a $67 million KC-46A Tanker charge.$6.8 billion

During the quarter, Defense, Space & Security received an award for eight F-15EX advanced fighter aircraft for the U.S. Air Force and a contract extension for the for NASA, as well as contracts for nine additional MH-47G Block II Chinook helicopters for the U.S. Army Special Operations and four additional 702X satellites. Also in the quarter, the U.S. Air Force and Boeing team was awarded the Collier Trophy for aerospace excellence for the X-37B autonomous spaceplane. Significant milestones included inducting the 20 U.S. Navy F/A-18 into the Service Life Modification program as well as delivering the first Bell Boeing V-22 Osprey to and the first MH-47G Block II Chinook to the U.S. Army Special Operations.International Space StationJapanth

Backlog at Defense, Space & Security was , of which 30 percent represents orders from customers outside the$62 billionU.S.

Global Services

Global Services third-quarter revenue decreased to , driven by lower commercial services volume due to COVID-19, partially offset by higher government services volume (Table 6). Third-quarter operating margin decreased to 7.3 percent primarily due to lower commercial services volume and additional severance costs.$3.7 billion

During the quarter, Global Services signed an agreement with GECAS for 11 737-800 Boeing Converted Freighters, secured a six-year P-8A support contract for the Royal Australian Air Force, and was awarded F-15EX training and services support contracts by the U.S. Air Force. Global Services also delivered the first P-8A Operational for the United Kingdom Royal Air Force.Flight Trainer

Additional Financial Information

At quarter-end, Boeing Capital's net portfolio balance was . The change in revenue and earnings from other unallocated items and eliminations was primarily due to the timing of cost allocations. Earnings from other unallocated items and eliminations was also impacted by lower enterprise research and development expense. Interest and debt expense increased due to higher debt balances. The third quarter effective tax rate reflects tax benefits related to the five year net operating loss carryback provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the impact of pre-tax losses.$2.0 billion

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:the United States of America

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP  excluding the  The represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP  excluding the net earnings per share impact of the and. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 12-13.earnings from operationsFAS/CAS service cost adjustment.  FAS/CAS service cost adjustment diluted earnings per share FAS/CAS service cost adjustment  Non-operating pension and postretirement expensesU.S.

Free Cash Flow

Free cash flow is GAAP  reduced by capital expenditures for . Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.operating cash flowproperty, plant and equipment

Caution Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the COVID-19 pandemic and related government actions, including with respect to our operations, our liquidity, the health of our customers and suppliers, and future demand for our products and services; (2) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers, (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels and acquisition priorities of the government; (7) our dependence on government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non- operations, including sales to non- customers; (15) threats to the security of our or our customers' information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft concentration in our customer financing portfolio; (18) changes in our ability to obtain debt financing on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; and (24) potential environmental liabilities.U.S.U.S.U.S.U.S.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

   

   

   

(Unaudited)The Boeing Company and Subsidiaries Summary of Business Segment Data

Effective at the beginning of 2020, certain programs were realigned between our Defense, Space & Security segment and Unallocated items, eliminations and other. Business segment data for 2019 has been adjusted to reflect the realignment.

   

(Unaudited)The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures

The tables provided below reconcile the non-GAAP financial measures core operating (loss)/earnings, core operating margin, and core (loss)/earnings per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted (loss)/earnings per share. See page 5 of this release for additional information on the use of these non-GAAP financial measures.

(Unaudited)The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures

The tables provided below reconcile the non-GAAP financial measures core operating loss, core operating margin, and core loss per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted (loss)/earnings per share. See page 5 of this release for additional information on the use of these non-GAAP financial measures.

--  Financial results continue to be significantly impacted by COVID-19 and
        the 737 MAX grounding
    --  Proactively managing liquidity and transforming for the future
    --  Revenue of , GAAP loss per share of () and core
        (non-GAAP)* loss per share of ()
    --  Operating cash flow of ; cash and marketable securities of
        
    --  Total backlog of , including more than 4,300 commercial
        airplanes$14.1 billion$0.79$1.39($4.8) billion$27.1 billion$393 billion
Table 1. Summary            Third Quarter                Nine Months
Financial Results

(Dollars in Millions,       2020      2019    Change    2020      2019    Change
except per share data)

Revenues                        (29)%         (27)%

GAAP

(Loss)/Earnings From        ()        NM     ()         NM
Operations

Operating Margin            (2.8)%      6.3%    NM      (11.0)%     0.4%    NM

Net (Loss)/Earnings         ()        NM     ()         NM

(Loss)/Earnings Per Share  ()         NM      ()        NM

Operating Cash Flow       ()  ()    NM    ()   ()    NM

Non-GAAP*

Core Operating              ()          NM     ()   ()    NM
(Loss)/Earnings

Core Operating Margin       (5.3)%      4.5%    NM      (13.5)%   (1.5)%    NM

Core (Loss)/Earnings Per   ()         NM      ()  ()    NM
Share

*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on
page 5, "Non-GAAP Measures Disclosures."$14,139$19,980$42,854$58,648$401$1,259$4,718$229$466$1,167$3,502$374$0.79$2.05$6.10$0.66$4,819$2,424$14,401$226$754$895$5,773$864$1.39$1.45$7.88$1.13
Table 2. Cash Flow                    Third Quarter         Nine Months

(Millions)                            2020      2019      2020       2019

Operating Cash Flow                 ()  ()  ()    ()

Less Additions to Property, Plant &   ()    ()   ()  ()
Equipment

Free Cash Flow*                     ()  ()  ()  ()

*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are
on page 5, "Non-GAAP Measures Disclosures."$4,819$2,424$14,401$226$262$465$1,038$1,387$5,081$2,889$15,439$1,613
Table 3. Cash, Marketable Securities and Debt Balances Quarter-End

(Billions)                                             Q3 20  Q2 20

Cash                                                     

Marketable Securities1                                   

Total                                                    

Debt Balances:

The Boeing Company, net of intercompany loans to BCC     

Boeing Capital, including intercompany loans               

Total Consolidated Debt                                  

1 Marketable securities consists primarily of time deposits due
within one year classified as "short-term investments."$10.6$20.0$16.5$12.4$27.1$32.4$59.1$59.5$1.9$1.9$61.0$61.4
Table 4. Commercial    Third Quarter               Nine Months
Airplanes

(Dollars in Millions)   2020     2019   Change    2020      2019    Change

Commercial Airplanes        28      62  (55)%         98       301  (67)%
Deliveries

Revenues                    (56)%         (54)%

Loss from Operations  ()   ()    NM    ()  ()    NM

Operating Margin       (38.1)%  (0.5)%    NM     (54.2)%   (15.4)%    NM$3,596$8,249$11,434$24,793$1,369$40$6,199$3,813
Table 5. Defense, Space & Third Quarter                Nine Months
Security

(Dollars in Millions)      2020    2019    Change     2020     2019     Change

Revenues                        (2)%           (3)%

Earnings from Operations            (17)%            (60)%

Operating Margin            9.2%   10.8%  (1.6) Pts     5.3%    12.8%  (7.5) Pts$6,848$7,002$19,478$20,168$628$754$1,037$2,581
Table 6. Global Services Third Quarter                Nine Months

(Dollars in Millions)     2020    2019    Change     2020     2019      Change

Revenues                       (21)%          (15)%

Earnings from Operations           (60)%              (85%)

Operating Margin           7.3%   14.4%  (7.1) Pts     2.6%    14.6%  (12.0) Pts$3,694$4,658$11,810$13,820$271$673$307$2,013
Table 7. Additional Financial Information Third Quarter      Nine Months

(Dollars in Millions)                      2020    2019     2020      2019

Revenues

Boeing Capital                                                

Unallocated items, eliminations and other  ()           ()    ()

Earnings from Operations

Boeing Capital                                                  

FAS/CAS service cost adjustment                         

Other unallocated items and eliminations  ()  ()    ()  ()

Other income, net                                           

Interest and debt expense                 ()  ()  ()    ()

Effective tax rate                         49.6%    0.8%     40.1%  (350.6)%$71$66$205$207$70$5$73$340$30$29$47$86$353$364$1,055$1,093$314$521$965$1,731$119$121$325$334$643$203$1,458$480
Contact:

Investor Relations:   or  (312) 544-2140

Communications:Maurita SutedjaKeely MoosMichael Friedman[email protected]
The Boeing Company and Subsidiaries

                    Consolidated Statements of Operations

                                 (Unaudited)

                                       Nine months ended   Three months ended
                                          September 30
                                                              September 30

(Dollars in millions, except per share     2020      2019      2020      2019
data)

Sales of products                                

Sales of services                         8,198     8,134     2,737     2,785

Total revenues                           42,854    58,648    14,139    19,980

Cost of products                       (36,001)  (46,584)  (10,910)  (14,674)

Cost of services                        (6,817)   (6,752)   (2,185)   (2,241)

Boeing Capital interest expense            (33)      (49)      (10)      (15)

Total costs and expenses               (42,851)  (53,385)  (13,105)  (16,930)

                                              3     5,263     1,034     3,050

Loss from operating investments, net       (61)       (3)      (14)       (8)

General and administrative expense      (2,989)   (2,857)     (955)   (1,001)

Research and development expense, net   (1,871)   (2,470)     (574)     (778)

Gain/(loss) on dispositions, net            200       296       108       (4)

(Loss)/earnings from operations         (4,718)       229     (401)     1,259

Other income, net                           325       334       119       121

Interest and debt expense               (1,458)     (480)     (643)     (203)

(Loss)/earnings before income taxes     (5,851)        83     (925)     1,177

Income tax benefit/(expense)              2,349       291       459      (10)

Net (loss)/earnings                     (3,502)       374     (466)     1,167

Less: net loss attributable to             (49)                (17)
noncontrolling interest

Net (loss)/earnings attributable to    ()          ()    
Boeing Shareholders

Basic (loss)/earnings per share         ()        ()     

Diluted (loss)/earnings per share       ()        ()     

Weighted average diluted shares           566.3     570.4     566.6     569.2
(millions)$34,656$50,514$11,402$17,195$3,453$374$449$1,167$6.10$0.66$0.79$2.07$6.10$0.66$0.79$2.05
The Boeing Company and Subsidiaries

                 Consolidated Statements of Financial Position

                                  (Unaudited)

(Dollars in millions, except per share data)          September 30  December 31
                                                              2020         2019

Assets

Cash and cash equivalents                                         

Short-term and other investments                            16,552          545

Accounts receivable, net                                     2,762        3,266

Unbilled receivables, net                                    8,860        9,043

Current portion of customer financing, net                     100          162

Inventories                                                 86,961       76,622

Other current assets, net                                    5,213        3,106

Total current assets                                       131,012      102,229

Customer financing, net                                      2,010        2,136

Property, plant and equipment, net of accumulated           11,969       12,502
depreciation of  and 

Goodwill                                                     8,071        8,060

Acquired intangible assets, net                              2,941        3,338

Deferred income taxes                                          704          683

Investments                                                  1,052        1,092

Other assets, net of accumulated amortization of         3,502        3,585
and 

Total assets                                                   

Liabilities and equity

Accounts payable                                                 

Accrued liabilities                                         22,220       22,868

Advances and progress billings                              51,974       51,551

Short-term debt and current portion of long-term debt        3,634        7,340

Total current liabilities                                   92,307       97,312

Deferred income taxes                                          503          413

Accrued retiree health care                                  4,429        4,540

Accrued pension plan liability, net                         15,343       16,276

Other long-term liabilities                                  2,907        3,422

Long-term debt                                              57,325       19,962

Total liabilities                                          172,814      141,925

Shareholders' equity:

Common stock, par value  — 1,200,000,000 shares         5,061        5,061
authorized; 1,012,261,159 shares issued

Additional paid-in capital                                   6,687        6,745

Treasury stock, at cost - 447,744,896 and 449,352,405     (54,819)     (54,914)
shares

Retained earnings                                           47,029       50,644

Accumulated other comprehensive loss                      (15,779)     (16,153)

Total shareholders' equity                                (11,821)      (8,617)

Noncontrolling interests                                       268          317

Total equity                                              (11,553)      (8,300)

Total liabilities and equity$10,564$9,485$20,241$19,342$671$580$161,261$133,625$14,479$15,553$5.00$161,261$133,625
The Boeing Company and Subsidiaries

                     Consolidated Statements of Cash Flows

                                  (Unaudited)

                                                               Nine months ended

                                                                 September 30

(Dollars in millions)                                              2020     2019

Cash flows – operating activities:

Net (loss)/earnings                                            ()     

Adjustments to reconcile net loss to net cash (used)/provided
by operating activities:

Non-cash items –

Share-based plans expense                                           165      160

Depreciation and amortization                                     1,668    1,643

Investment/asset impairment charges, net                            317      106

Customer financing valuation adjustments                             12      249

Gain on dispositions, net                                         (200)    (296)

Other charges and credits, net                                      912      190

Changes in assets and liabilities –

Accounts receivable                                                 125      315

Unbilled receivables                                                 56  (1,053)

Advances and progress billings                                      428    2,355

Inventories                                                     (9,653)  (9,565)

Other current assets                                                319    (224)

Accounts payable                                                (3,303)    1,626

Accrued liabilities                                                 967    5,495

Income taxes receivable, payable and deferred                   (2,404)    (989)

Other long-term liabilities                                       (149)    (577)

Pension and other postretirement plans                            (556)    (570)

Customer financing, net                                             108      391

Other                                                               289      144

Net cash used by operating activities                          (14,401)    (226)

Cash flows – investing activities:

Property, plant and equipment additions                         (1,038)  (1,387)

Property, plant and equipment reductions                            275      334

Acquisitions, net of cash acquired                                         (492)

Contributions to investments                                   (25,846)  (1,439)

Proceeds from investments                                         9,772      967

Purchase of distribution rights                                             (20)

Other                                                                14     (10)

Net cash used by investing activities                          (16,823)  (2,047)

Cash flows – financing activities:

New borrowings                                                   42,362   19,621

Debt repayments                                                 (8,792)  (8,978)

Contributions from noncontrolling interests                                    7

Stock options exercised                                              31       51

Employee taxes on certain share-based payment arrangements        (169)    (241)

Common shares repurchased                                                (2,651)

Dividends paid                                                  (1,158)  (3,473)

Net cash provided by financing activities                        32,274    4,336

Effect of exchange rate changes on cash and cash equivalents,        26     (27)
including restricted

Net increase in cash & cash equivalents, including restricted     1,076    2,036

Cash & cash equivalents, including restricted, at beginning of    9,571    7,813
year

Cash & cash equivalents, including restricted, at end of         10,647    9,849
period

Less restricted cash & cash equivalents, included in                 83       86
Investments

Cash and cash equivalents at end of period$3,502$374$10,564$9,763
Nine months ended     Three months
                                              September 30          ended
                                                                 September 30

(Dollars in millions)                          2020      2019      2020     2019

Revenues:

Commercial Airplanes                                  

Defense, Space & Security                    19,478    20,168     6,848    7,002

Global Services                              11,810    13,820     3,694    4,658

Boeing Capital                                  205       207        71       66

Unallocated items, eliminations and other      (73)     (340)      (70)        5

Total revenues                                      

Earnings/(loss) from operations:

Commercial Airplanes                       ()  ()  ()    ()

Defense, Space & Security                     1,037     2,581       628      754

Global Services                                 307     2,013       271      673

Boeing Capital                                   47        86        30       29

Segment operating (loss)/earnings           (4,808)       867     (440)    1,416

Unallocated items, eliminations and other     (965)   (1,731)     (314)    (521)

FAS/CAS service cost adjustment               1,055     1,093       353      364

(Loss)/earnings from operations             (4,718)       229     (401)    1,259

Other income, net                               325       334       119      121

Interest and debt expense                   (1,458)     (480)     (643)    (203)

(Loss)/earnings before income taxes         (5,851)        83     (925)    1,177

Income tax benefit/(expense)                  2,349       291       459     (10)

Net (loss)/earnings                         (3,502)       374     (466)    1,167

Less: Net loss attributable to                 (49)                (17)
noncontrolling interest

Net (loss)/earnings attributable to Boeing ()          ()   
Shareholders

Research and development expense, net:

Commercial Airplanes                                        

Defense, Space & Security                       494       556       164      182

Global Services                                 110       102        45       29

Other                                           160       283        44      100

Total research and development expense,                     
net

Unallocated items, eliminations and other:

Share-based plans                             ()     ()     ()    ()

Deferred compensation                            34     (154)      (39)     (25)

Amortization of previously capitalized         (69)      (68)      (19)     (23)
interest

Customer financing impairment                           (250)

Research and development expense, net         (160)     (283)      (44)    (100)

Eliminations and other unallocated items      (690)     (919)     (175)    (352)

Sub-total (included in core operating         (965)   (1,731)     (314)    (521)
loss)

Pension FAS/CAS service cost adjustment         773       823       260      274

Postretirement FAS/CAS service cost             282       270        93       90
adjustment

FAS/CAS service cost adjustment               1,055     1,093           

Total                                               ()          ()$11,434$24,793$3,596$8,249$42,854$58,648$14,139$19,980$6,199$3,813$1,369$40$3,453$374$449$1,167$1,107$1,529$321$467$1,871$2,470$574$778$80$57$37$21$353$364$90$638$39$157
The Boeing Company and Subsidiaries

                   Operating and Financial Data

                            (Unaudited)

Deliveries                           Nine         Three months
                                    months           ended
                                    ended         September 30
                                  September
                                      30

Commercial Airplanes              2020  2019     2020      2019

 737                                12   118        3         5

 747                                 2     5        1         1

 767                                20    32        6        10

 777                                15    33 (1)    5        11

 787                                49   113       13        35

 Total                              98   301       28        62

Note: Aircraft accounted for as revenues by BCA and as operating
leases in consolidation identified by parentheses

Defense, Space & Security

 AH-64 Apache (New)                 18    27        7        17

 AH-64 Apache (Remanufactured)      44    56       12        21

 C-17 Globemaster III                —     1        —         1

 C-40A                               —     2        —         2

 CH-47 Chinook (New)                19    13        4         6

 CH-47 Chinook (Renewed)             3    16        2         7

 F-15 Models                         3     7        —         2

 F/A-18 Models                      14    16        5         6

 KC-46A Tanker                      10    21        4         9

 P-8 Models                          9    14        3         6

 Commercial and Civil Satellites     —     1        —         —

Total backlog (Dollars in millions)          September 30  December
                                                     2020       31
                                                              2019

Commercial Airplanes                               

Defense, Space & Security                          62,375   63,691

Global Services                                    17,464   22,902

Unallocated items, eliminations and other             544      217

Total backlog                                      

Contractual backlog                                

Unobligated backlog                                24,151   26,930

Total backlog$312,684$376,593$393,067$463,403$368,916$436,473$393,067$463,403
(Dollars in millions, except per      Third Quarter 2020     Third Quarter 2019
share data)

                                     $ millions Per Share   $ millions Per Share

Revenues                                 14,139                 19,980

(Loss)/earnings from operations           (401)                  1,259
(GAAP)

Operating margin (GAAP)                  (2.8)%                   6.3%

FAS/CAS service cost adjustment:

Pension FAS/CAS service cost              (260)                  (274)
adjustment

Postretirement FAS/CAS service cost        (93)                   (90)
adjustment

FAS/CAS service cost adjustment           (353)                  (364)

Core operating (loss)/earnings           ()                   
(non-GAAP)

Core operating margin (non-GAAP)         (5.3)%                   4.5%

Diluted (loss)/earnings per share                  ()                 
(GAAP)

Pension FAS/CAS service cost             ()     (0.46)      ()    (0.48)
adjustment

Postretirement FAS/CAS service cost        (93)     (0.16)        (90)    (0.16)
adjustment

Non-operating pension expense              (84)     (0.16)        (93)    (0.17)

Non-operating postretirement expense         10       0.02          27      0.05

Provision for deferred income taxes          90       0.16          90      0.16
on adjustments1

Subtotal of adjustments                  ()    ()      ()   ()

Core (loss)/earnings per share                     ()                 
(non-GAAP)

Weighted average diluted shares (in                  566.6                 569.2
millions)

1 The income tax impact is calculated using the 
corporate statutory tax rate.$754$895$0.79$2.05$260$274$337$0.60$340$0.60$1.39$1.45U.S.
(Dollars in millions, except per       Nine Months 2020       Nine Months 2019
share data)

                                     $ millions Per Share   $ millions Per Share

Revenues                                 42,854                 58,648

(Loss)/earnings from operations         (4,718)                    229
(GAAP)

Operating margin (GAAP)                 (11.0)%                  0.4 %

FAS/CAS service cost adjustment:

Pension FAS/CAS service cost              (773)                  (823)
adjustment

Postretirement FAS/CAS service cost       (282)                  (270)
adjustment

FAS/CAS service cost adjustment         (1,055)                (1,093)

Core operating loss (non-GAAP)         ()                 ()

Core operating margin (non-GAAP)        (13.5)%                (1.5 %)

Diluted (loss)/earnings per share                  ()                 
(GAAP)

Pension FAS/CAS service cost             ()     (1.36)      ()    (1.45)
adjustment

Postretirement FAS/CAS service cost       (282)     (0.50)       (270)    (0.47)
adjustment

Non-operating pension expense             (255)     (0.46)       (280)    (0.49)

Non-operating postretirement expense         37       0.07          80      0.14

Provision for deferred income taxes         267       0.47         272      0.48
on adjustments1

Subtotal of adjustments                ()    ()    ()   ()

Core loss per share (non-GAAP)                     ()               ()

Weighted average diluted shares (in                  566.3                 570.4
millions)

1 The income tax impact is calculated using the 
corporate statutory tax rate.$5,773$864$6.10$0.66$773$823$1,006$1.78$1,021$1.79$7.88$1.13U.S.

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